Hi, I’m new to this forum. Any good advice about purchasing an annuity.
Don’t do it.
You can also try searching the Bogleheads forums.
What kind of annuity? What do you want to accomplish?
Agree to search Bogleheads.org. SPIA–single person immediate annuity is he only thing I’ve heard recommended and even then only in very selective cases.
There are several types of annuities that are recommended. Depends what you want to accomplish.
Annuities from chariries can be a nice way of donating, getting tax deductions AND getting an annuity.
You need to be really careful with the type of annuity. Ones like index annuities can have some odd features. We are putting some of our money in an immediate fixed annuity that yields 8.9% with 100% survivorship.
Ha ha. My mom is now 94 years old and those annuities are still paying (and I love to imagine the scowls every time those checks go out). As noted above, they are not for everyone, but sometimes you beat the actuarial odds. With most (all?), you are gambling that you will live longer than “they” think you will.
@DocT Let’s try to avoid misleading folks. That 8.9% yield includes return of your own money.
Not after it’s depleted which is ~ 10 years
By the way that’s exactly how any state pension works.
Do your due diligence and weigh your options. If it’s complicated and hard to understand, they are trying to hide all the fees you are paying–walk away. Know what you are and are NOT getting for what you are paying. Know how much you are paying and how secure the company that is offering the payout is–once it’s bankrupt, often that’s the end, no matter what was promised.
I’m afraid op may be a fake member. Who comes on cc and makes their first post about annuities?
^Well, if we see another brand new poster responding to the OP with the name of a particular annuity, then we’ll know!
People on forums seem to be very anti-annuity, but there are situations where they work quite well within the scope of a financial plan. Look for a well rated company. I see many people with good annuity options that have been paying for decades, I am a little more concerned about locking in at current interest offerings when I retire!
The are some bad annuities out there, and there are some very good ones. There are two basic types of annuities, immediate and deferred. Immediate annuities provide a guaranteed income starting now (or very soon). They are relatively simple, and provide a guarantee that no other financial product can–guaranteed income you cannot outlive. Deferred annuities grow money for future use. Some are good, some not so much. Some are basically CD alternatives, earning a fixed interest rate higher than most banks (fixed annuity). Some let you invest in stock and bond funds, while providing certain guarantees (variable annuity). Some earn an interest rate tied to stock market performance (index annuity). The ones that draw ire are those with high fees relative to the benefit those fees are buying. Not every annuity is like that. Some provide very valuable guarantees for your money. Everyone’s needs are different. Some of these annuities are just right for some people, while others might better accomplish their goals with a different investment.
Life insurance is cool - the company insuring me wants me to live forever. With an annuity however… I don’t like a company to have a financial interest in me dying.
^ That company probably has a million annuitants. They really don’t care.